<PAGE> 1
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
Form 10-Q
X QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15 (D) OF THE SECURITIES
--- EXCHANGE ACT OF 1934 FOR THE QUARTERLY PERIOD ENDED JUNE 30, 2000
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15 (D) OF THE SECURITIES
--- EXCHANGE ACT OF 1934 FOR THE TRANSITION PERIOD FROM APRIL 1, 2000
TO JUNE 30, 2000
Commission File number: 0-18454 (formerly 33-26759)
---------------------------
SOUTHEAST ACQUISITIONS III, L.P.
--------------------------------
(Exact name of registrant)
Delaware 23-2532708
-------- ----------
(State or other jurisdiction of
incorporation or organization) (I.R.S. Employer Identification No.)
3011 Armory Drive, Suite 310
Nashville, Tennessee 37204
(Address of Principal Executive Offices)
Issuer's Telephone Number: 615-834-0872
------------
Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the preceding 12 months (or for such shorter period that the registrant was
required to file such reports) and (2) has been subject to such filing
requirements for the past 90 days. Yes [x] No [ ]
<PAGE> 2
PART I - FINANCIAL INFORMATION
Item 1 - Financial Statements
The unaudited financial statements of Southeast Acquisitions III, L.P.
(the "Partnership") at June 30, 2000 attached hereto as Exhibit A.
Item 2 - Management's Discussion and Analysis of Financial Condition and Results
of Operations.
Background
The Partnership was formed to acquire, own and realize appreciation in
the following properties by holding them for investment and eventual sale (each
a "Property," collectively the "Properties"): 208 acres of undeveloped land in
Fulton County, Georgia; 265 acres of undeveloped land in Henry County, Georgia;
24 acres of undeveloped land near Nashville, Tennessee; 47 acres of undeveloped
land near Fort Myers, Florida; and 51 acres of undeveloped land near Columbia,
South Carolina. There can be no assurance that the Partnership's objectives will
be realized. At June 30, 2000, the remaining land consisted of approximately 208
acres of the Fulton County, Georgia land, approximately 47 acres of the Fort
Myers, Florida land and approximately 35 acres of the Columbia, South Carolina
land.
Results of Operations for Second Quarter of 2000 Compared with Second
Quarter of 1999
The Partnership activities for the second quarter of 2000 and the
second quarter of 1999 were focused on the sale of Partnership property. During
the second quarter of 2000 the Partnership recognized $43,511 in non-refundable
earnest money, which represents interest at the rate of eight percent (8%) per
annum, to extend the closing on approximately 100 acres of the Fulton County
Property that closed in escrow during the fourth quarter of 1999. This sale is
now scheduled to be funded no later than August 31, 2000. Other income during
the second quarter of 2000 consisted of interest income of $4,525 as compared
with $11,655 in the second quarter of 2000. The decrease in interest earned is a
result of having a lower average cash reserve during the quarter compared to the
same quarter of 1999. There was a decrease to the cash reserve resulting from a
distribution to the limited partners.
During the second quarter of 2000 there was a sale of .29 acres of the
Columbia, South Carolina Property for a sales price of $11,020. This land was
sold to the same party that purchased 7.29 acres of the South Carolina Property
in the first quarter of 2000. There were no sales during the second quarter of
1999.
Expenses in the second quarter of 2000 included general and
administrative expenses of $12,178 versus $15,278 in the second quarter of 1999.
The decrease was primarily due to
<PAGE> 3
decreased professional fees. The 1999 professional fees included engineering
fees of $3,498 related to the sale of the property. There have been no such fees
in 2000. In addition, the Partnership had $6,625 of management fees, the same as
was incurred in the second quarter of 1999. Real estate taxes in the second
quarter of 2000 were $3,541 compared with $3,562 in the second quarter of 1999.
The Partnership also incurred greenbelt rollback taxes of $473 during the second
quarter of 2000 on the Columbia, South Carolina Property that was sold in May.
There was no such tax in 1999. Insurance in the second quarter of 2000 was $77
compared with $324 in the second quarter of 1999.
Inflation did not have any material impact on operations during the
second quarter of 2000 and it is not expected to materially impact future
operations.
Liquidity and Capital Resources
After making a $620,000 distribution to the limited partners, the
Partnership had cash reserves of $259,011 at June 30, 2000, which will be used
to cover the following estimated annual costs: management fees of $26,500,
accounting fees of $13,500, legal fees of $8,000, insurance costs of $240,
property taxes of $14,135, and other general and administrative expenses of
$4,000. There will be a distribution to the limited partners if the previously
mentioned Fulton County land sale is funded in the third quarter. In the General
Partner's opinion, the Partnership's reserves will be sufficient for an
additional year and six months. However, if additional expenses are incurred or
if the Partnership goes forward with the construction to bring sewer to the
Fulton County Property, the reserves may be inadequate to cover the
Partnership's operating expenses. If the reserves are exhausted, the Partnership
may have to dispose of some or all of the Properties or incur indebtedness on
unfavorable terms.
PART II - OTHER INFORMATION
Item 1 - Legal Proceedings
None
Item 2 - Changes in Securities
There were no changes in the Partnership's securities during the second
quarter of 2000.
Item 3 - Defaults Upon Senior Securities
There was no default in the payment of principal, interest, a sinking
or purchase fund installment or any other default with respect to any
indebtedness of the Partnership. The Partnership have issued no preferred stock;
accordingly, there has been no arrearages or delinquencies with respect to any
such preferred stock.
<PAGE> 4
Item 4 - Submission of Matters to a Vote of Security Holders
No matters were submitted to the Partners for a vote during the second
quarter of 2000.
Item 5 - Other Information
None
Item 6 - Exhibits and Reports on Form 8-K
Reports on Form 8-K
None
Exhibits (numbered in accordance with Item 601 of Regulation S-K)
<TABLE>
<CAPTION>
Exhibit Numbers Description Page Number
--------------- ----------- -----------
<S> <C> <C>
27 Financial Data Schedule (for SEC use only)
</TABLE>
<PAGE> 5
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934,
this Report has been signed below by the following persons on behalf of the
Registrant and in the capacities and on the date indicated.
<TABLE>
<CAPTION>
Signature Title Date
--------- ----- ----
<S> <C> <C>
/s/ Richard W. Sorenson Member, August 11, 2000
--------------------------- Southern Management
Richard W. Sorenson Group, LLC
</TABLE>
<PAGE> 6
EXHIBIT A
SOUTHEAST ACQUISITIONS III, LP
BALANCE SHEETS
<TABLE>
<CAPTION>
JUNE 30
2000 DECEMBER 31,
ASSETS (UNAUDITED) 1999
----------- -----------
<S> <C> <C>
LAND HELD FOR SALE $ 2,950,188 $ 3,063,712
CASH AND CASH EQUIVALENTS 259,011 528,342
ACCOUNTS RECEIVABLE 14,344 --
DEPOSIT - WATER LINE EXTENSION 100,000 5,750
PREPAID EXPENSES 53 --
----------- -----------
$ 3,323,596 $ 3,597,804
=========== ===========
LIABILITIES AND PARTNERS' EQUITY
ACCOUNTS PAYABLE AND ACCRUED EXPENSES $ 12,660 $ 13,510
ESCROW ON PENDING SALE OF LAND 40,000 40,000
PAYABLE TO PREVIOUS GENERAL PARTNER 3,584 3,584
PARTNERS' EQUITY:
GENERAL PARTNER (29,309) (32,774)
LIMITED PARTNERS (12,400 UNITS OUTSTANDING) 3,296,661 3,573,484
----------- -----------
3,267,352 3,540,710
----------- -----------
$ 3,323,596 $ 3,597,804
=========== ===========
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS.
<PAGE> 7
EXHIBIT A
SOUTHEAST ACQUISITIONS III, LP
STATEMENTS OF OPERATIONS AND PARTNERS' EQUITY
(UNAUDITED)
<TABLE>
<CAPTION>
FOR THE THREE MONTHS FOR THE SIX MONTHS
ENDED JUNE 30 ENDED JUNE 30
---------------------------- ----------------------------
2000 1999 2000 1999
---- ---- ---- ----
<S> <C> <C> <C> <C>
REVENUES:
GAIN ON SALE OF LAND $ 5,532 $ -- $ 144,643 $ 1,260,124
EXTENSION FEES AND INTEREST INCOME 43,511 -- 247,219 --
INTEREST INCOME 4,525 11,655 9,835 15,562
----------- ----------- ----------- -----------
$ 53,568 $ 11,655 401,697 1,275,686
----------- ----------- ----------- -----------
EXPENSES:
GENERAL AND ADMINISTRATIVE 12,178 15,278 20,766 21,660
MANAGEMENT FEE 6,625 6,625 13,250 13,250
REAL ESTATE TAXES 4,014 3,562 20,223 10,071
INSURANCE 77 324 120 647
DELAWARE FRANCHISE & EXCISE TAX 100 100 100 330
TENNESSEE STATE TAX -- -- 596 --
----------- ----------- ----------- -----------
22,994 25,889 55,055 45,958
----------- ----------- ----------- -----------
NET INCOME (LOSS) 30,574 (14,234) 346,642 1,229,728
PARTNERS' EQUITY,
BEGINNING OF PERIOD 3,856,778 5,717,161 3,540,710 4,473,199
----------- ----------- ----------- -----------
CAPITAL DISTRIBUTION (620,000) (2,046,000) (620,000) (2,046,000)
PARTNERS' EQUITY,
END OF PERIOD $ 3,267,352 $ 3,656,927 $ 3,267,352 $ 3,656,927
=========== =========== =========== ===========
WEIGHTED AVERAGE NUMBER
OF LIMITED PARTNERSHIP
UNITS OUTSTANDING 12,400 12,400 12,400 12,400
=========== =========== =========== ===========
INCOME (LOSS) FROM OPERATIONS
PER LIMITED PARTNERSHIP
INTEREST $ 2.44 $ (1.14) $ 27.68 $ 98.18
=========== =========== =========== ===========
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS.
<PAGE> 8
EXHIBIT A
SOUTHEAST ACQUISITIONS III, LP
STATEMENTS OF CASH FLOWS
(UNAUDITED)
<TABLE>
<CAPTION>
FOR THE SIX MONTHS
ENDED JUNE 30
---------------------------
2000 1999
---- ----
<S> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
PROCEEDS FROM SALE OF LAND $ 258,167 $ 2,052,255
EXTENSION FEE AND INTEREST INCOME RECEIVED 247,219 --
INTEREST INCOME RECEIVED 9,835 15,562
CASH PAID FOR OPERATING EXPENSES (70,302) (46,161)
CASH PAID FOR DEPOSIT (94,250) --
--------- -----------
NET CASH PROVIDED BY OPERATING
ACTIVITIES 350,669 2,021,656
CASH FLOWS FROM FINANCING ACTIVITIES:
DISTRIBUTION TO LIMITED PARTNERS (620,000) (2,046,000)
--------- -----------
DECREASE IN CASH (269,331) (24,344)
CASH, BEGINNING OF PERIOD 528,342 493,350
--------- -----------
CASH, END OF PERIOD $ 259,011 $ 469,006
========= ===========
RECONCILIATION OF NET INCOME TO NET CASH PROVIDED BY OPERATING ACTIVITIES:
NET INCOME $ 346,642 $ 1,229,728
ADJUSTMENTS TO RECONCILE NET INCOME
TO NET CASH PROVIDED BY
OPERATING ACTIVITIES:
GAIN ON SALE OF LAND (144,643) (1,260,124)
NET PROCEEDS FROM SALE OF LAND 258,167 2,052,256
(DECREASE) INCREASE IN ACCOUNTS PAYABLE AND
ACCRUED EXPENSES (850) 2,074
INCREASE IN DEPOSIT (94,250) --
INCREASE IN PREPAID EXPENSES (53) (647)
INCREASE IN ACCOUNTS RECEIVABLE (14,344) (1,631)
--------- -----------
NET CASH PROVIDED BY OPERATING ACTIVITIES $ 350,669 $ 2,021,656
========= ===========
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS.
<PAGE> 9
SOUTHEAST ACQUISITIONS III, LP
(A Limited Partnership)
NOTES TO FINANCIAL STATEMENTS
For the Six Months Ended June 30, 2000
(Unaudited)
A. ACCOUNTING POLICIES
The unaudited financial statements presented herein have been prepared in
accordance with the instructions to Form 10-Q and do not include all of
the information and note disclosures required by generally accepted
accounting principles. These statements should be read in conjunction with
the financial statements and notes thereto included in the Partnership's
Form 10-K for the year ended December 31, 1999. In the opinion of
management, such financial statements include all adjustments, consisting
only of normal recurring adjustments, necessary to summarize fairly the
Partnership's financial position and results of operations. The results of
operations for the six-month period ended June 30, 2000 may not be
indicative of the results that may be expected for the year ending
December 31, 2000.
B. RELATED PARTY TRANSACTIONS
The General Partner and its affiliates have been actively involved in
managing the Partnership's operations. Compensation earned for these
services in the first six months were as follows:
<TABLE>
<CAPTION>
2000 1999
---- ----
<S> <C> <C>
Management Fees $ 13,250 $13,250
Reimbursements $ 1,047 $ 3,085
Commissions $ 7,477 $57,069
</TABLE>
